Taoiseach Enda Kenny has refused to rule out the prospect of a special tax deal to attract highly-skilled emigrant workers to return and help re-build the economy.

But Mr Kenny insisted that the Government has not discussed such a proposal becoming part of the Budget due in 13 days time. Under pressure in the Dáil he also conceded that the idea may be “unfair” to other Irish workers.

Fianna Fáil leader Micheál Martin dismissed as “a bananas idea,” a suggestion from Jobs Minister, Mary Mitchell O’Connor, that a 30pc tax rate could apply for a limited period to returning workers with scarce skills in sectors like medicine, finance and IT. The suggestion was published in the Irish Independent on Tuesday.

Workers in such sectors could otherwise expect to pay an effective 50pc tax rate and the skills shortage was holding up economic recovery.

“Many Irish graduates are thinking: ‘Who came up with this bananas idea?’” Mr Martin said.

The Fianna Fáil leader said the scheme would be illegal under EU law as any concession open to an Irish citizen must also be extended to citizens of the other member states. He said it would acknowledge the privileged status of some jobs.

“No construction workers need apply,” Mr Martin insisted.

But the Taoiseach said no decisions had been made on any Budget provision due for delivery on Tuesday, October 11. He also admitted that the special skilled emigrant tax scheme had not been discussed by Cabinet.

The Fianna Fáil leader repeatedly asked if the Taoiseach found the suggestion by Minister Mitchell O’Connor as “discriminatory and unfair.”

Mr Kenny frankly replied: “I would regard that as being unfair and discriminatory - of course." But the Taoiseach also argued that Fianna Fáil in government had done many discriminatory things which his government was now trying to remedy.